BEST BUY CHAIRMAN EXITS AFTER PROBE

Departure follows revelation that he failed to alert board about former CEO’s conduct

Best Buy’s founder Richard Schulze is stepping down as chairman of the beleaguered consumer-electronics chain after the company’s investigation revealed that he failed to alert the board of directors when he learned that the CEO was having an inappropriate relationship with a female employee.

Best Buy said Monday that a probe it launched in March determined that former CEO Brian Dunn, who resigned last month, violated company policy and showed poor judgment by having a “close personal relationship” with a subordinate.

The inquiry also found that Schulze, who first heard about the relationship in December when another employee gave him a written statement regarding it, acted inappropriately by not telling human resources or the company’s board about the allegations.

“I confronted him with the allegations (which he denied), told him his conduct was totally unacceptable and contrary to Best Buy’s policies and everything I, and the company, stand for,” Schulze said in a statement on Monday. “I understand and accept the findings.”

The latest revelations are part of a scandal that couldn’t have come at a worse time for the 46-year-old retailer. The company, which has more than 1,400 U.S. locations, is struggling to regain its footing as it faces increased competition from online retailers and discounters. Customers have all but abandoned buying at so-called “big box” stores like Best Buy.

Best Buy reported in March that it widened its net loss to $1.7 billion, and the company announced a major restructuring. That included closing some big-box stores, cutting 400 corporate jobs and trimming $800 million in costs in addition to opening 100 smaller, more profitable locations.